Gong sounds for Rank sale
LEISURE and gaming group Rank hit the jackpot with a rise of 8½p to 200½p after UBS became the latest broker to upgrade the stock to a buy.
It also lifted its 12-month target price to 240p from 215p. But as turnover in the stock swelled to much more than six times Monday's total to 41m, dealers heard revived rumours that the long-awaited takeover bid could at last be on the cards.
Credit Suisse and Oriel Securities recently advised clients to buy Rank believing new chief executive Ian Burke will soon sell its Hard Rock music memorabilia restaurants for around £550m and then return up to 93p a share in cash to investors.
Rank will then be left as a focused gaming company with an enterprise value of around £2.6bn which could attract the attention of a predator.
Hungry private equity groups are bound already to have Rank on their radar screens and could even make a move before Hard Rock is sold. They love the mountains of cash generated by these businesses. UBS says profits from the casino arm remain robust and sees potential for improvements to the bingo division.
Hefty turnover in Spirent Communications of late has also had tongues wagging about possible stakebuilding or a bid for the network technology company.
Another 13m were traded yesterday and the close was 2p better at 42p following confirmation that Sherborne Investments has amassed a 9.63% stake.
Sherborne is an investment firm controlled by Edward Bramson, founder of specialist turnaround firm Hanover Investments. He made a name for himself pursuing his own brand of shareholder activism and recently put the cat amongst the pigeons at speciality chemicals group Elementis (½p easier at 85½p, eventually becoming group chairman.
Spirent's management will not like him breathing down their necks. The company's interim figures are due tomorrow and are not expected to be impressive. The fun is about to start.
England cricketers' third test and series win against Pakistan kept dealers in a happy frame of mind as they awaited the Fed's decision on US interest rates. Ben Bernanke and co were tipped to halt a two-year cycle of raising rates and Wall Street moved 51 points higher early on in anticipation of a rates pause. That still failed to inspire the Footsie, which closed 10.7 points lower at 5818.1.
Oil giant BP did not help London's cause, slipping 8½p more for a two-day fall of 22p to 614p following the closure of its Prudhoe Bay oil field in Alaska because of pipeline corrosion.
Super rich Michael Spencer's ICAP, the world's largest inter-dealer broker, jumped 11¼p to 460¼p. The group has been on many fund managers' shopping lists after forking out almost £500m earlier this year for US rival EBS, a big player in the forex systems market.
Morgan Stanley's overweight rating and 1560p price target helped Dana Petroleum gush 80p to £13. Sentiment was also boosted by news that Dana and Venture Production (28½p higher at 838p) have started production at the Goosander oil and gas field in the North Sea.
Mobile phone games and ringtones provider Monstermob, which has hit the market with three profit warnings this year, jumped 14p to 70p on news of a bid approach.
A positive agm statement helped security company Arc Risk Management edge 0.15p higher to 1p. It is confident of a significant increase in profits in 2008.
Placed on Aim at 79p by broker Hanson Westhouse, shares of Beijing-based RenaSola closed at 90p. The company makes solar wafers for use in crystalline solar panels.
African Eagle firmed 1½p to 13p after announcing a further earn-in on its Ndola copper asset in Zambia. Phelps Dodge is purchasing £1.4m of new shares in AE at a 10% premium to the prevailing market price.
With the silence from 25% shareholder Nasdaq deafening, shares of the London Stock Exchange lost a 29p gain to close 7p lower at 1098p.
News that 2006 has already become a record year for money raising through IPOs attracted early buying but that soon waned. During the first seven months, £17.8bn has been raised compared to 2000's full-year total of £17.4bn.
• Aim-listed Elite Strategies, chaired by former Allders boss Harvey Lipsith, gained 0.375p to 3¾p. Retec Interface, in which it holds a 69% stake, is rolling out its 'Listening Posts' to 33 Tesco stores to help drive sales in the music & entertainment division.
The system aims to provide customers with the opportunity to either touch the screen or scan a product to preview CDs, DVDs or games content.
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